How to Fail at Accounts Payable Automation in 5 Easy Steps
Stephanie Dula 28 Oct 2015As the market for AP technology evolves and becomes more affordable, the options for process automation are seemingly endless, as are the opportunities for mistakes and missteps. We’ve pulled together a list of 5 surefire ways to fail when launching your AP process improvement project (AKA: what not to do.)
1. Automate Flawed Processes
Many organizations are resistant to adopt an automation technology because they believe that ‘current processes work‘. This attitude that things could be faster and more efficient, but generally function adequately, often leads organizations down a path of automation, but not necessarily process improvement. There may be a tendency to automate bits and pieces of the entire lifecycle of the invoice with multiple tools, which can lead to lower visibility, increased errors and more downtime. While it’s true that a one-size-fits-all solution won’t work for some very large or complex organizations, there are comprehensive solutions that work well for those in the middle market, what we define as organizations whose revenue is between 250 million and around 2 billion.
2. Shoot in the Dark
As the adage goes, ‘what gets measured, gets improved,’ and it’s certainly true in Accounts Payable. If you’re not currently using and want to introduce metrics and benchmarking to your AP operations for the first time, it’s helpful to think in terms of a 4-step cycle in which you use the techniques to:
- Measure your current performance and establish a baseline
- Establish specific goals for improvement
- Secure the resources you need to achieve your goals
- Measure and, if necessary, make adjustments to ensure achievement of your goals
One of the best indicators we’ve found for success and establishing a KPI is to measure the cost per invoice to your organization.
3. Neglect Supplier Relations
According to our 2015 Invoice Receipt Management Report, 42% of organizations still struggle to gain supplier adoption when migrating invoices from paper to an electronic format. While most of the organizations we work with do identify this as an issue, especially at the beginning, we’ve also heard from a fair number of people that the onboarding process was much easier than they originally feared. If you’re not in a position to mandate that suppliers participate, it’s crucial to employ an ongoing strategy to communicate to suppliers the benefits.
4. Have eInvoicing Tunnel Vision
Suppliers are sending a variety of different invoice formats, and due to their fear of eInvoicing network fees, lack of education of the benefits, and other barriers, they will likely continue to do so. However, there are alternative strategies that organizations can use to successfully handle the receipt of other, paper-based invoices.
These many available strategies for managing invoice receipt can be used before or in addition to eInvoicing to supplement its value. When these methods are strategically implemented according to an organization’s intake of invoice types or structure, they can bring most of the same benefits of an eInvoicing network. These methods include OCR data capture, mailroom services, email data extraction and online portals.
5. Don’t Plan for Scalable Growth
Finally, similar to the problem in step #1, if an organization simply sets out to automate flawed processes in a piecemeal fashion, with no plan for scalable growth, it risks losing out on some of the more significant advances in technology that could bring major long-term savings. The first step is do a current state assessment and define current costs. Then you can document the metrics and plan out the benchmarks you want to achieve. Communicate that to the steering committee and together you will be able to effectively win over your stakeholders.
Interested in learning more about avoiding some of the most common pitfalls we’ve discovered in the automation process? View the full free web clinic featuring Henry Ijams and Jimmy LeFever, Get Ready for 2016: Top 5 AP Automation Mistakes to Avoid anytime on-demand.
